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Radio frequency identification (RFID) technology has been touted as a powerful tool in the fight against terrorism, from tracking cargo containers to streamlining border crossings, but questions about its cost and potential applications have clouded its prospects.

A project under way at Hong Kong International Airport, one of the busiest in the world, could supply many answers. Perhaps the world's largest single-site RFID implementation, the $50 million project is intended to boost security while improving the airport's baggage-handling efficiency.

The airport, also known as Chek Lap Kok, handles about 38 million passengers and 17 million bags each year. With the expected opening of Hong Kong's Disneyland theme park in September, the volume could reach 50 million passengers a year.

All of those bags must be checked, tagged, examined and tracked to ensure that they are loaded on the correct flight. Aside from being costly, systematic baggage identification and tracking errors can mean that bags risk falling through security cracks.

The bar code tags that the airport used before the RFID project was launched and as the RFID tag machines and readers are being installed perform adequately, but they can't keep up with the airport's baggage volume, said John Shoemaker, vice president of worldwide RFID development at Symbol Technologies, the U.S. company that is installing the airport's system. When bar code tags are stretched, torn or defaced, they become unreadable.

"When you can't pass 10 [percent] to 15 percent of the bags through the machines because of bar code misreads, that means thousands of bags have to be addressed manually," Shoemaker said. "That means people have to get involved in a complicated process, which translates into a lot of mishandled baggage."

RFID tags and readers, on the other hand, are accurate at least 95 percent of the time. When fewer bags have to be dealt with manually, better security and lower costs result. A system that can improve security is obviously beneficial, but it's a much easier sell if it can help pay for itself through cost savings.

With baggage, the cost justification is simple. Every missing or mishandled bag costs an average of $100 to replace or transport to its owner. About 1 percent to 2 percent of the total bags handled are lost or misplaced each year. At Hong Kong's airport, if 1 percent of the bags went missing, rectifying the problem would cost $17 million a year.

"Security was certainly a factor in the decision by Hong Kong to turn to RFID," Shoemaker said. "But the primary reason was operational efficiency and to be able to address growth. They wanted a good customer experience."

Passengers should see no difference with the RFID system because the silicon chip and antenna that make up the RFID tag are included in what looks like a bar code strip, which is attached to the bag using an adhesive inlay, Shoemaker said. The RFID printer encodes the tag with an International Air Transport Association "license plate" that includes the basic
airline information along with passenger information and the flight number.

Readers track the bag at various nodes  explosives-detection systems, baggage carousels, loading devices and conveyor belts  providing an audit trail and assurance that the bag is heading for its correct destination.

About 100 conveyor lines at the airport are being converted to RFID. The system is being installed to help with baggage transfers first, and that stage should be finished by the end of the year, Shoemaker said. Then it will handle baggage from the ticket counter. After that, there's the possibility of using RFID for air cargo operations and boarding passes.

Asian countries are generally more accepting of new technologies such as RFID, particularly when they already have a proven track record, Shoemaker said.

He said about a dozen other airports in Asia have shown interest in deployments similar to Hong Kong's. It's unclear how soon U.S. airports will show interest. "It's very difficult to get airports in the [United States] to embrace RFID or any new technology," Shoemaker said.

It comes down to cost and relevance, said Jeff Woods, a principal research analyst at Gartner Research. Baggage-handling systems at airports tend to be well engineered, he said, and although RFID is pushed as a silver bullet solution to many problems, it isn't always the answer.

"You can't read a bar code well if another bag is sitting on top of the tag, for example, but this is a matter of process," Woods said. "If it's just a case of tweaking the [bar code-based] system that way, then it's not worthwhile to install RFID."

In the United States, airlines are responsible for handling baggage, not the airport authorities. And many airlines are financially strapped, so taking on the added cost of RFID systems is not worthwhile, said Sara Shah, an analyst at ABI Research.

The costs can be high because the airlines would have to put a new infrastructure in place at each airport where RFID systems operate.

"In many other industries, the only way RFID has moved forward is that one body has brought everyone together to agree on such things as standards, policies and so on," she said. "Once [the airline industry] has that kind of forum in the [United States], then perhaps this could happen here also, but so far it hasn't."

Fast Facts

Hong Kong International Airport handles about 38 million passengers and 17 million bags each year.